Correlation Between Mainstay Epoch and Mainstay Unconstrained

Can any of the company-specific risk be diversified away by investing in both Mainstay Epoch and Mainstay Unconstrained at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mainstay Epoch and Mainstay Unconstrained into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mainstay Epoch Small and Mainstay Unconstrained Bond, you can compare the effects of market volatilities on Mainstay Epoch and Mainstay Unconstrained and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mainstay Epoch with a short position of Mainstay Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Epoch and Mainstay Unconstrained.

Diversification Opportunities for Mainstay Epoch and Mainstay Unconstrained

-0.52

Correlation Coefficient

Mainstay Epoch  Mainstay Unconstrained

Excellent diversification

The 3 months correlation between Mainstay and Mainstay is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch Small and Mainstay Unconstrained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Unconstrained and Mainstay Epoch is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mainstay Epoch Small are associated (or correlated) with Mainstay Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Unconstrained has no effect on the direction of Mainstay Epoch i.e., Mainstay Epoch and Mainstay Unconstrained go up and down completely randomly.

Pair Corralation between Mainstay Epoch and Mainstay Unconstrained

Assuming the 90 days horizon Mainstay Epoch Small is expected to under-perform the Mainstay Unconstrained. In addition to that, Mainstay Epoch is 6.66 times more volatile than Mainstay Unconstrained Bond. It trades about -0.1 of its total potential returns per unit of risk. Mainstay Unconstrained Bond is currently generating about 0.2 per unit of volatility. If you would invest  859.00  in Mainstay Unconstrained Bond on December 28, 2024 and sell it today you would earn a total of  18.00  from holding Mainstay Unconstrained Bond or generate 2.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Mainstay Epoch Small  vs.  Mainstay Unconstrained Bond

Mainstay Epoch Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mainstay Epoch Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Mainstay Unconstrained

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Unconstrained Bond are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Mainstay Unconstrained is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mainstay Epoch and Mainstay Unconstrained

The main advantage of trading using opposite Mainstay Epoch and Mainstay Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Epoch position performs unexpectedly, Mainstay Unconstrained can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mainstay Unconstrained will offset losses from the drop in Mainstay Unconstrained's long position.

The idea behind Mainstay Epoch Small and Mainstay Unconstrained Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..